Georgia lowers remote seller sales threshold, eliminates reporting requirement

Updated 12.20.2019

Georgia began enforcing economic nexus and non-collecting seller use tax reporting on January 1, 2019. Starting January 1, 2020, the economic nexus sales threshold is reduced. The use tax reporting requirement is eliminated as of April 28, 2019.

The Peach State adopted its first remote sales tax law before states had the authority to impose a sales tax collection obligation on out-of-state sellers with no physical presence in the state. It therefore gave qualifying remote sellers the option to either collect and remit Georgia sales tax or comply with use tax notification and reporting requirements.

Old law

The current law applies to out-of-state sellers that, in the current or previous calendar year, have either:

• More than $250,000 from retail sales of tangible personal property delivered electronically or physically to a location in Georgia; or
• 200 or more separate retail sales of tangible personal property delivered electronically or physically to a location in Georgia.

Sellers meeting one of the above thresholds that don’t collect Georgia sales tax are required to:

• Notify each potential purchaser that Georgia sales or use tax may be due
• Send to each purchaser with annual retail sales totaling at least $500 a sales and use tax statement that includes
  • The total amount paid by the purchaser during the previous calendar year
  • The dates of each purchase, amounts of each purchase, and category of each purchase, if known
  • The tax status (exempt or taxable) of each purchase, if known
• File a copy of each of the purchaser’s sales and use tax statements with the Georgia Department of Revenue

New law

On June 21, 2018, the Supreme Court of the United States overruled the physical presence rule in South Dakota v. Wayfair, Inc. The Wayfair ruling grants states the authority to tax remote sales in addition to sales by businesses with a physical presence in the state. It also eliminates the need for Georgia’s use tax reporting option.

Thus the enactment of House Bill 182, which does away with the use tax reporting option so any seller meeting one or both economic nexus threshold is required to register with the state and collect and remit Georgia sales tax.

HB 182 also reduces the economic nexus sales threshold from $250,000 to $100,000. As a result, a remote seller must register to do business in Georgia if it has more than $100,000 in sales or at least 200 transactions in the state in the current or previous calendar year. Learn more.

Georgia isn’t the only state to tweak its remote sales tax laws in the wake of Wayfair. Kentucky and Washington are also both eliminating their non-collecting seller use tax reporting laws; California raised its sales threshold mere weeks after the original threshold took effect; and North Dakota got rid of its transaction threshold.

While such adjustments may eventually simplify remote sales tax compliance for some businesses, they add to the confusion and uncertainty many businesses now face. One way to make remote sales tax compliance less complex is to automate collection, filing, and remittance. Learn more